Housing finance companies gain as much as 9.3% on RBI move

Mumbai: Shares of housing finance companies gained as much as 9.3 percent after the RBI said that banks can now provide loans up to 90 percent for properties that cost Rs 30 lakh or below.

Consequently, GIC Housing Finance surged 9.24 percent, Dewan Housing Finance Corporation gained 4.68 percent, LIC Housing Finance was up 3.95 percent and Housing Development Finance Corporation rose by 1.57 percent on BSE.

Earlier, the facility was available only in cases where the cost was up to Rs 20 lakh.

This will benefit those home seekers who plan to buy properties in the range of Rs 20-30 lakh.

The RBI's decision comes in the wake of all the major banks reducing interest rate on home loans.

The Reserve Bank through a circular yesterday said in the case of 'individual housing loans' falling under the loan category of up to Rs 30 lakh, the LTV (Loan to Value) ratio is now up to 90 percent.

For properties between Rs 30 lakh and 75 lakh, the LTV is up to 80 percent and for those above Rs 75 lakh, the ratio comes in at 75 percent.